Exploring the bounded rationality in human decision anomalies through an assemblable computational framework

Some seemingly irrational decision behaviors (anomalies), once seen as flaws in human cognition, have recently received explanations from a rational perspective. The basic idea is that the brain has limited cognitive resources to process the quantities (e.g., value, probability, time, etc.) required for decision making, with specific biases arising as byproducts of the resource allocation that is optimized for the environment. While appealing for providing normative accounts, the existing resource-rational models have limitations such as inconsistent assumptions across models, a focus on optimization for one specific aspect of the environment, and limited coverage of decision anomalies. One challenging anomaly is the peanuts effect, a pervasive phenomenon in decision-making under risk that implies an interdependence between the processing of value and probability. To extend the resource rationality approach to explain the peanuts effect, here we develop a computational framework-the Assemblable Resource-Rational Modules (ARRM)-that integrates ideas from different lines of boundedly-rational decision models as freely assembled modules. The framework can accommodate the joint functioning of multiple environmental factors, and allow new models to be built and tested along with the existing ones, potentially opening a wider range of decision phenomena to bounded rationality modeling. For one new and three published datasets that cover two different task paradigms and both the gain and loss domains, our boundedly-rational models reproduce two characteristic features of the peanuts effect and outperform previous models in fitting human decision behaviors.

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Publication Details

Journal
Cognitive Psychology
Published
2025-01-01
DOI
https://doi.org/10.1016/j.cogpsych.2025.101713
Primary Topic
Decision-Making and Behavioral Economics
Type
article
Field-Weighted Citation Impact
0.00

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article

Exploring the bounded rationality in human decision anomalies through an assemblable computational framework

Y. Lu, Xiangjuan Ren, Hang Zhang, LU Yi-long
Cognitive Psychology
Decision-Making and Behavioral Economics
article

Exploring the bounded rationality in human decision anomalies through an assemblable computational framework

Y. Lu, Xiangjuan Ren, Hang Zhang, LU Yi-long
article en

Abstract

Some seemingly irrational decision behaviors (anomalies), once seen as flaws in human cognition, have recently received explanations from a rational perspective. The basic idea is that the brain has limited cognitive resources to process the quantities (e.g., value, probability, time, etc.) required for decision making, with specific biases arising as byproducts of the resource allocation that is optimized for the environment. While appealing for providing normative accounts, the existing resource-rational models have limitations such as inconsistent assumptions across models, a focus on optimization for one specific aspect of the environment, and limited coverage of decision anomalies. One challenging anomaly is the peanuts effect, a pervasive phenomenon in decision-making under risk that implies an interdependence between the processing of value and probability. To extend the resource rationality approach to explain the peanuts effect, here we develop a computational framework-the Assemblable Resource-Rational Modules (ARRM)-that integrates ideas from different lines of boundedly-rational decision models as freely assembled modules. The framework can accommodate the joint functioning of multiple environmental factors, and allow new models to be built and tested along with the existing ones, potentially opening a wider range of decision phenomena to bounded rationality modeling. For one new and three published datasets that cover two different task paradigms and both the gain and loss domains, our boundedly-rational models reproduce two characteristic features of the peanuts effect and outperform previous models in fitting human decision behaviors.

Cognitive PsychologyVol. 156
Peking University (CN), Peking University Sixth Hospital (CN)
National Natural Science Foundation of China, Ministry of Science and Technology of the People's Republic of China
Peace, Justice and strong institutions
Openalex Percentile: Top 99%
Decision-Making and Behavioral Economics
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